Wichita eagle. [volume] (Wichita, Kan.) 1886-1890, 1887-06-01
PACIFIC RAILROADS.
Investigation Resumed by the
@RCommission in Boston
Yesterday.
Judge Dillon Gave a chronology
cal Review Of the Lit
igatiOn in
Which the Union Pacific Rail-
road has Been Involved
to date.
Gov. Ames Testified as to his Ac-
uuaintance With the Affairs of
the Road and his
ACQUISITION and Ownership Of Stocks
and Bonds of the Central and
Other Branches Of the
System.
PACIFIC INVESTIGATION.
The Ciphon Applied to Judge Dillon
and Gov. Ames.

BOSTON, May o1.-Ine racine rallrOaQ
investigating commission continued its
public investigation of the affairs of the
Union Pacific railroad this forenoon.
The first witness was Judge Dillon of
New York, who gave chronological re-
view of the litigation in which the Union
Pacific has been involved. The bulk of
the testimony went to show the friction
existing between the road and the govern
ment under the present circumstances.
He stated that most of this litigation grew
out of section six of the act of 1862, modi
fed by section five of the act of 1884 The
witness contended that by the act of 1873
the government has not paid the company
half the amount for transportation which
is rightfuily due the road under the terms
of the contract.
Governor Ames arrived at this point and
was sworn, Judge Dillon giving way to
him. The governor testified that he be-
came acquainted with the affairs of the
road when 100 miles of it had been built
He gave history of the extension of the
road and stated that he was not connected
with the Central branch at the time of the
roads inception. His father, Oak Ames,
owned 666 shares and ~ bonds, which af
forwards came into his (Oliver's) posses
sion. Witness first real connection with
the Central branch was in 1878. The Of
ficers of the company found that the more
branch roads they built the better the
Central branch was off. The witness now
owns 1862 shares In branch roads.
After acquiring the 666 shares from his
fathers estate he began purchasing shares,
buying up considerable of the stock at 70
per share, the par value. He bought some
of the stock as high as 16O Mr.. Gould
commenced negotiations in September or
October, 1879. He and his party were
verbally and none of them
wrote any letters When the Pacific com
pany were building in Kansas Mr. Gould
commended that they were invading his
territory and he began building a parallel
road, seeing that they were getting toward
Denver very rapidly. Boston friends of
the Pacific did not like to see the company
building line against such opposition.
Witness went to Mr.. Gould and explain
ed to him the condition and prospects of
the road and also gave him other statistics
in a written statement made up in the
Atchison Office Witness did not know
who made the statement and did not revise
it. Mr. Gould said he would look it over
Meanwhile witness was conducting negotia-
lions with the Chicago, Burlington &
Quincy and Rock Island roads Witness
went to New York, had a meeting with
Gould, Russell Sage and others Mr..
Gould spoke very disparingly of the road
and said he did not believe much in agri-
cultural roads any way Mr.. Sage told
witness that he would take the road and
give the land assets for it. Witness saw
Mr. Gould next morning. Mr.. Gould said
he had talked the matter over with Mr.
Dillon and preferred to offer 5000 per share
for the stock We had been asking $500
for it but eventually agreed to carry his
to the directors.
A paper was drawn up conveying 1900
shares Of Union Pacific stock, or So of the
whole, at $3.50 per share and STIMULATING
that Jay Gould was to have control of the
board and making other stipulations. AT
ter the directors present and other direct
ors signed the paper, which they did as in
dividuas, Mr. Gould advised witnesses to
go to every stakeholder and get them to
ratify the agreement.
On November 18th, 1879. Mr. Gould
offered witness an option of $500 for 900
shares and $l75 per share for l ,000 more.
On November 18th he offered to take the
remaining l 600 shares at $50, all payable
in Kansas City bonds at par. Immediately
after this was consummated witness no
ticed that Mr.. Gould appeared very happy,
while the witness never saw more
gloomy set Of men than the
Union Pacific directors. They felt that
Mr. Gould had them in his power. The
total amount paid by Mr.. Gould was
81 ,96S, 100 In 1876 they desired that wit
ness should sign a paper in common with
other holders of credit mobilier stock
agreeing that if the credit mobiler stock
was turned into Union Pacific funds it
would release all claims of the company
for alleged receipts This paper the wit
ness refused to sign, and he was ia conse-
quence of this refusal dropped from the
board of directors.
Mahlon D. opanlding, director of the
thought the road was able to pay
the government every cent owed if it was
treated as fairly as its competitors.
At the afternoon session Judge Dillon
testified with regard to the position of the
Union Pacific and the government, treat
ing more especially of the disputes between
them on the Omaha bridge and the Phil
man contract His evidence bore particu-
larly on the legal questions involved and
he quoted several decisions of the United
States supreme court in support OF the
positions of the company. Adjourned.